Today we're going to take a closer look at Large-Cap Consumer Discretionary company O'Reilly Automotive, whose shares are currently trading at $99.73. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
O'Reilly Automotive's Valuation Is in Line With Its Sector Averages:
O'Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, Puerto Rico, Mexico, and Canada. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93. In contrast, O'Reilly Automotive has a trailing 12 month P/E ratio of 35.6 based on its earnings per share of $2.8.
O'Reilly Automotive has moved 31.7% over the last year compared to 15.4% for the S&P 500 -- a difference of 16.3%. O'Reilly Automotive has a 52 week high of $100.6 and a 52 week low of $73.11.
Wider Gross Margins Than the Industry Average of 41.4%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $10,150 | $11,604 | $13,328 | $14,410 | $15,812 | $16,708 |
| Gross Margins | 53% | 52% | 53% | 51% | 51% | 51% |
| Net Margins | 14% | 15% | 16% | 15% | 15% | 14% |
| Net Income (M) | $1,391 | $1,752 | $2,165 | $2,173 | $2,347 | $2,387 |
| Net Interest Expense (M) | $140 | $161 | $145 | $158 | $202 | $223 |
| Depreciation & Amort. (M) | $271 | $315 | $328 | $358 | $409 | $462 |
| Diluted Shares (M) | 78 | 74 | 70 | 65 | 61 | 59 |
| Earnings Per Share | $17.88 | $23.53 | $31.1 | $33.44 | $38.47 | $40.66 |
| EPS Growth | n/a | 31.6% | 32.17% | 7.52% | 15.04% | 5.69% |
| Avg. Price | $390.22 | $421.41 | $564.36 | $657.44 | $968.58 | $98.9 |
| P/E Ratio | 21.59 | 17.75 | 17.98 | 19.48 | 24.96 | 2.42 |
| Free Cash Flow (M) | $1,080 | $2,371 | $2,764 | $2,585 | $2,028 | $2,026 |
| CAPEX (M) | $628 | $466 | $443 | $563 | $1,006 | $1,023 |
| EV / EBITDA | 15.71 | 12.88 | 13.37 | 14.51 | 18.13 | 3.02 |
| Total Debt (M) | $3,891 | $4,123 | $4,124 | $4,372 | $5,570 | $5,521 |
| Net Debt / EBITDA | 1.76 | 1.34 | 1.16 | 1.29 | 1.47 | 1.45 |
| Current Ratio | 0.86 | 0.86 | 0.77 | 0.71 | 0.73 | 0.71 |
O'Reilly Automotive benefits from growing revenues and increasing reinvestment in the business, wider gross margins than its peer group, and a strong EPS growth trend. The company's financial statements show generally positive cash flows and healthy leverage levels. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.71.
